China's Shenghua Begins Production at Yichun LFP Plant

Shenghua New Material

Jiangxi Shenghua New Material, a leading Chinese manufacturer of lithium-iron-phosphate (LFP), has initiated production at its new LFP facility in Yichun city, located in southeastern China’s Jiangxi province. The facility is being constructed in two phases, with each phase contributing 75,000 tonnes per year of LFP production capacity. The first phase, representing an investment of 1.5 billion yuan ($214 million), includes six production lines. The trial run of the first line has already started, and full production is expected to begin by mid-October. All six production lines are scheduled to be operational by the end of 2024.

Partnership with CATL Strengthens LFP Output

Shenghua has partnered with CATL, China’s largest power battery manufacturer, to build the plant and supply its products. CATL has made an advance payment to support the plant’s construction, and in return, Shenghua has committed to supplying CATL with at least 140,000 tonnes of LFP annually from 2025 to 2027.

Shenghua’s output has rapidly expanded, producing 47,000 tonnes of LFP in the first half of 2024, more than tripling from 15,102 tonnes during the same period in 2023. For the entire year of 2023, Shenghua produced 42,159 tonnes of LFP, with a production capacity of 140,000 tonnes per year. The company supplies LFP to major clients such as CATL, Svolt Energy Technology, and Henan Lithium Power Battery Technology.

LFP batteries continue to dominate China's energy storage market. In August, LFP batteries accounted for 75% of production and 74% of installed battery volumes, according to data from the China Automotive Battery Innovation Alliance.